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Toyota and Honda delay restart amid part supply issues | Toyota and Honda delay restart amid part supply issues |
(about 1 hour later) | |
Japanese carmakers Toyota and Honda have delayed plans to restart production, saying that they cannot get the parts they need. | |
Toyota will not restart production before 26 March. Honda Motors says it has extended a production shutdown until at least 27 March. | Toyota will not restart production before 26 March. Honda Motors says it has extended a production shutdown until at least 27 March. |
The firms have halted operations after Japan was hit by a deadly earthquake and tsunami. | The firms have halted operations after Japan was hit by a deadly earthquake and tsunami. |
Analysts said the shutdown would cost companies millions of dollars a day. | Analysts said the shutdown would cost companies millions of dollars a day. |
A spokeswoman for Honda said that the company now expects delivery of new vehicles in Japan to be delayed. | A spokeswoman for Honda said that the company now expects delivery of new vehicles in Japan to be delayed. |
Different pace | Different pace |
Assembling a car requires thousands of parts to be put together. These are provided by different suppliers. | Assembling a car requires thousands of parts to be put together. These are provided by different suppliers. |
Most of the parts are shipped to the manufacturers a short time ahead of the assembly line requirements, analysts said. | Most of the parts are shipped to the manufacturers a short time ahead of the assembly line requirements, analysts said. |
This means that most car factories have relatively low inventories, which can create shortages in supply. | This means that most car factories have relatively low inventories, which can create shortages in supply. |
Until the supply chain is sorted out, analysts warn that plants will not be able to operate at full speed and there may be patchy production across the country. | |
"Each supplier has to be able to reach the levels before the devastation to reach the full production plan," said Vivek Vaidya of Frost & Sullivan. | "Each supplier has to be able to reach the levels before the devastation to reach the full production plan," said Vivek Vaidya of Frost & Sullivan. |
Manufacturers of Japanese cars in other countries are not so severely affected by the shortage of parts. | |
Paul Ormond of Honda UK said the firm's site in Swindon was not running at full production at present and therefore did not need so many components. | |
"We will probably be building 160,000 cars with the potential production capacity of 250,000, so that will actually mean we don't need to have a full inventory until we get to that level, which won't be for another year to 18 months," he told BBC News. | |
Infrastructure issues | Infrastructure issues |
To get back to full speed, Japan's car manufacturers have not only got to overcome their own issues, but also wait for external factors to get sorted. | To get back to full speed, Japan's car manufacturers have not only got to overcome their own issues, but also wait for external factors to get sorted. |
To begin with, they need uninterrupted power supplies, which analysts say will take some time given the situation at the Fukushima Daiichi plant. | To begin with, they need uninterrupted power supplies, which analysts say will take some time given the situation at the Fukushima Daiichi plant. |
"A significant percentage of Japan's electrical generating capacity has been taken offline, and is unlikely to be restored soon," said Aaron Bragman of IHS Global Insight. | "A significant percentage of Japan's electrical generating capacity has been taken offline, and is unlikely to be restored soon," said Aaron Bragman of IHS Global Insight. |
To make matters worse for the manufacturers, a shortfall in power supply in one part of Japan cannot be easily replenished by transferring power from another part of the country. | To make matters worse for the manufacturers, a shortfall in power supply in one part of Japan cannot be easily replenished by transferring power from another part of the country. |
Different power grids in Japan function at different frequencies, making it difficult for power to be transferred. | |
"The issues with the Japanese auto industry are quite serious," he said | "The issues with the Japanese auto industry are quite serious," he said |
"The situation is unlikely to return to normalcy any time soon." | "The situation is unlikely to return to normalcy any time soon." |